Monday, 17 Apr 2023
Medicines are an essential commodity in the healthcare sector, and their retailing allows easy access to various healing and life-saving drugs. Consequently, pharmacies are needed in every community, and their number is growing in Melbourne to manage the demand of the rising population. Pharmacy business owners are experts in medicines and help customers with vaccines and prescription and non-prescription drugs.
However, pharmacists are not financially literate and may struggle to manage their books. Tracking and analysing finances is essential to maintain the profitability of the small business and manage its debts. Thus, here are a few bookkeeping tips for pharmacists that ensure a positive cash flow and compliance with regulations. These guidelines allow effective organisation and management of financial information to understand the bottom line easily.
Pharmacists have to deal with huge volumes of transactions and track details of customers, stock and prescriptions. Thus, they need to go paperless and have the data consolidated in one place with the help of cloud-based accounting software. Most pharmacy bookkeeper Melbourne ensure that the Point of Sale (POS) system is integrated with the accounting software.
It helps to store customer information, supplier data, medical history of customers, bills, invoices, stock details and provides real-time access to vital information. It saves time because of the automation features and keeps records organised and streamlined.
Financial statements must be generated every week or month and assessed to understand the expenses and revenue of the business. These must be analysed before sending out the next order or making other vital business decisions. These are needed to know how the business is performing and what needs to be done to improve its financial status.
The bookkeepers need these statements to file taxes, budget, apply for a business loan and evaluate the health of the pharmacy care business in Melbourne. Investors and stakeholders also need them to track profit, loss and cash flow.
Pharmacies have to store, sell, replace and procure stock regularly. Thus, bookkeeping in healthcare is crucial. The business owner must reconcile inventory more often than other small businesses in Melbourne to ensure the data is accurately recorded. It is needed to identify any inconsistencies in the records and the stock available with the pharmacy.
Bookkeepers reconcile by physical stocktaking and matching the numbers with the records. It helps to find errors like missing items and expired medicines that need to be discarded but are mentioned in the records. They rectify the discrepancies and maintain flawless records. It also reduces the risk of theft and damage due to negligence in storage.
The pharmacy owner can use the key benchmark range to assess the business performance against other businesses. It is calculated as the cost of sales to turnover and helps to determine the turnover accurately. If the business does not provide a record cost of sales in the tax report, it can use total expenses to turnover as the key benchmark range.
The turnover must be within the range provided by the ATO. The business needs to boost its sales and generate higher revenue if it is below the benchmark range. For example, a pharmacy with an annual turnover of $1,500,001 – $3,500,000 should have a cost of sales/turnover between 61% and 65%.
Many pharmacy owners operate at multiple locations. They must have separate accounting data for every unit because consolidated numbers will not give a clear picture of individual businesses. Checking the financial health of each unit is crucial to understand its performance and weak areas.
Also, separate financial data helps to compare the figures with each other and identify the problems as well as strengths. It can help the business owner to emulate the success story of one location at other locations.
Pharmacists should be aware of the tax deductions that can be claimed to reduce tax bills. They must check the cost of their stock regularly and take part in tax planning. If the value of the trading stock goes up in the year, it will be considered assessable income. Conversely, if the value goes down, it can be claimed for deduction.
Bookkeepers in Melbourne advise prepaying some of the expected expenses in the future, which helps to claim deductions in the current financial year. Pharmacists can also claim deductions for bad debts.
Running a business is a humungous responsibility. It is easier to manage the entity’s profitability when the financial management task is outsourced to a renowned bookkeeping company in Melbourne that specialises in pharmacy bookkeeping. They identify ways of improving cash flow and reducing the wastage of stock.
The professionals set up the budget and take charge of payroll management and inventory. They record all the transactions and maintain up-to-date books while planning for the tax season.
Pharmacies have complex sales and stock data that must be organised and analysed effectively. The tips mentioned above help adhere to laws and maintain an efficient bookkeeping system that saves time, effort and money.
